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Sell-Side vs. Buy-Side BizDev: Hunters vs. Evaluators …

… And why you’ve likely mis-casted the role, missed an interesting product integration or wasted valuable time for you and a potential partner.

Typically, in any evaluation between two companies, there are two sides.  The side that is “selling” a concept and the side that is “buying” the concept.   The Business Development function can serve an important role, but the structure and process depends on which side of this discussion you are on. 

Business Development at a start-up is inherently a “sell-side” function.  “Sell-Side” BD is typically looking to federate your business, attempting to generate distribution, market awareness and new revenue channels.   It usually benefits from an individual with a strong sense of product, a creative ability to develop use cases, an ability to navigate through organizations and a “Hunter’s”’ instinct.  

Business Development for a large, established organization is typically a “Buy-Side” function.  Buy-Side BD is typically responsible for being able to source, evaluate and channel 3rd party solutions to the right department in an organization and structure consistent and favorable business terms to integrate 3rd party solutions into their business environment.  It usually benefits from an individual who is a strong evaluator of tech/talent, an assessor of whether a 3rd party services internal goals, an accurate router to the right business owner and a strong business negotiator. 

The biggest problem I encounter is that most organizations don’t distinguish between the two.  They typically have their “Sell-Side” and “Buy-Side” BD person one of the same, which undermines the difference in the two functions and the characteristics that are required to make each function individually valuable.

“Buy-Side” BD is an incredibly important function, but it needs to be respected beyond being a “gatekeeper”. The problem is that inbound requests are often forwarded and intercepted by the opposing VP, BizDev as a gatekeeper rather than being placed into a formal process for evaluation.

Let’s play out a hypothetical situation … A “Sell-Side” BD person from Yelp is pro-actively validating new merchant relationships to monetize their check-in feature and generating new distribution deals for Yelp merchant reviews one day and the next day putting on their “Buy-Side” BD hat and asked to reactively evaluate 3rd party solutions, such as the viability of the SimpleGeo API or the Hunch personalization platform?  Do you want your BD person evaluating new technology and determining if it is a “product” fit?  Or would you prefer for your head of product or business owner managing those relationships?  This opens you up to leakage of potentially great ideas while your competitor is actively working a deal with the vendor.  While this is an arbitrary example, it happens all the time. 

One of the best “Buy-Side” BD structures that I have seen is from the team at Target.com.  They have a plan and a framework.  They have an internal “Buy-Side” BD team, who is briefed of internal objectives, who actively source potential vendors in the space, schedule a meeting/call with the right person at the vendor, loop in the appropriate business owner on their side for that meeting/call to evaluate the offering and then manages the process going forward.  It is a targeted approach, clean and organized, and really highlights the value of integrating many corporate objectives into a single business development group to be managed.

“Sell-Side” Business Development Framework

I recently wrote a post that focused heavily on the role of “Sell-Side” Business Development.  Here are a few highlights to focus and distinguish your “Sell-Side” BD responsibilities:

  1. Evangelizing a product/service (ie, your B2B Marketer)
  2. Looking to validate markets where the product/service has a natural fit
  3. Generating distribution deals
  4. Reporting back to management and product teams on market feedback
  5. Exploring monetization techniques. 

Think of Sell-Side Business Development as Scout Ants or your organization’s Special Forces.

“Buy-Side” Business Development Framework

“Buy-Side” Business Development, on the other hand, should be focused on integrating various functional objectives across an organization into a single, uniform group.  A “Buy-Side” BD person/team should have an intimate knowledge of functional goals and priorities across sales, marketing, product, infrastructure, etc. with a focus on sourcing vendors, routing vendors to the right part of the organization, managing the process and to negotiate favorable business terms.  They should sit with the various functional teams each week, reporting on companies they have met or spoken to for that function to evaluate the merits on.  They should tell vendors “I will put you in touch with the right person here” more often than they say “we are not interested”, extending market feedback directly to the business owners.  When passing an initial look at a potential partner/vendor, Buy-Side BD should determine if a vendor has a solution that:

  1. Is in the product, marketing, sales priority list or pipeline
  2. Has already been determined to have been built in-house or not
  3. Is competitive with an existing partner/vendor and understand differences
  4.  Is appropriate for which stakeholder within the organization to evaluate.

Additionally, “Buy-Side” BD is incredibly important to structure and negotiate deals with vendors and to create a consistent layer of deal terms, structures and legal language. 

Think of your “Buy-Side” BD team as your Air Traffic Control and Chief Negotiators.  

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